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Learn about all the advantages

Click on the video and find out what the Flexible Group Retirement Plan can do for you and your employees.

Advantages of the Flexible Group Pension Plan

  • Voluntary employee participation The Flexible Collective Retirement Plan is optional for employees, who agree to receive a part of their salary in kind and contribute to the policy. This enables them to optimise their remuneration for tax purposes and adapt it to their personal needs whenever they wish. 
  • Extensive covers The Flexible Group Retirement Plan offers extensive covers to insured managers and employees, or in the event of death to people designated by them.
  • Flexible An insurance policy adapted to the needs of each company and intended for a group of employees designated by the company, in compliance with commitments the company already has with its employees.
  • Lifecycle investing Invests under a lifecycle scheme, which adapts each employee’s investments to their estimated retirement date. 

Contributions

The contributions to be made annually by the company on behalf of the employee will be taken from the employee’s payroll amount, through the employee’s participation in the company’s flexible remuneration programme. Contributions may not exceed a percentage of the employee’s gross annual remuneration, which must be set in the plan’s rules, nor may they result in the monetary salary amount being less than the minimum inter-professional wage in force at any given time.

The BanSabadell Flexible Life Group Retirement Plan is a unit-linked life/savings insurance policy that invests in two asset portfolios under a life cycle scheme based on a time horizon in line with the estimated date of retirement. Thus, each employee, depending on their age, is assigned a specific distribution of the assets in which the proceeds are invested according to the years remaining until that date. The investment strategy becomes more and more prudent, with the percentage of equities being reduced in favour of bonds as the estimated retirement date draws closer. 

Flexible Group Retirement Plans Covers

Retirement

Total, permanent and major disability

Death

Severe or major dependency

Taxation

  • For the company Voluntary employee contributions are not deductible as an expense for the financial year but will be tax deductible for the year in which the insured person/beneficiary receives benefits. At that time, the company can deduct the full amount of the premiums paid for corporate tax purposes.
  • For the employee² Voluntary employee contributions are not applied to the taxable amount for personal income tax purposes. Taxation is deferred until the time of receipt of the benefit. At that time, if the contingency is due to retirement or disability the benefit received is taxed as income from work for personal income tax purposes.
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Getting started

If it does not already have them, the company will draw up the rules for the Flexible Collective Retirement Plan, in which these pension commitments that the company already has with its employees in the respective collective agreements or equivalent provisions will be set out so that it may then take out a group policy as the policyholder. The employees who participate in the policy are its insured people. Its beneficiaries will be, in the event of retirement, disability or dependence, the insured people, or the beneficiaries designated by the insured people in the event of death.  

As participation in the Flexible Group Retirement Plan is voluntary, employees who wish to participate must sign the Participation Agreement and the Modification of Remuneration Conditions - Flexible Remuneration Plan (novation agreement for working conditions for Flex Remuneration).  

 

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What else can we help you with?

Do you want to help your employees save for their retirement?

Employer pension plans (EPPs) could be a great option. They will help your employees supplement their public pension. Learn more

Do you want to build employee loyalty by allowing employees to personalise and optimise their salary for tax purposes?

Sabadell Flex Company is a totally online and user-friendly flexible remuneration programme that facilitates all operations for both the company and its employees. Learn more
FAQ

Have any other questions?

Is there a contribution limit for the Flexible Group Retirement Plan?

The maximum contribution depends on the limit of the total remuneration that can be allocated as remuneration in kind and may never exceed €99,999 per year. Wages in kind may not exceed 30 % of the worker’s wages and may not result in a reduction of the full amount of the minimum wage.

It’s important to note that, in most parts of Spain, contributions to group retirement plans with flexible remuneration do not count towards contribution limits for voluntary pension products (pension plans, insured pension plans and company pension plans), thus allowing workers to optimise their remuneration and retirement planning by using both types of instruments. 

What happens if the employee needs to redeem his or her Flexible Group Retirement Plan due to an exceptional liquidity situation (unemployment/long-term illness)?

Employees will be able to draw on the group insurance balance if they meet one of the exceptional liquidity requirements and provide the necessary documentation in proof thereof. 

How can an employee collect benefits from a group retirement plan (GRP)?

The forms of payment and recognition of the right to receive benefits from the group retirement plan owing to the aforementioned contingencies, may be:

  • Benefit as a capital sum, in the form of a lump-sum payment. A beneficiary may receive only one benefit under this plan in relation to any one contingency.
  • Benefit in the form of an annuity, and only for retirement contingencies. This consists of the receipt of two or more successive payments at regular intervals, including at least one payment each year of a constant or variable amount.
  • Mixed benefits combining annuities of any type with a capital sum payment, as stipulated in the preceding paragraphs. 
How are contributions to a group retirement plan taxed?

For the company, the contributions it makes as policyholder on behalf of its employees (insured individuals) are not deductible for corporate income tax purposes until benefits are paid.

For employees, contributions will not be included in their personal income taxable base, thereby reducing the withholding rate and deferring taxation until benefits are paid. 

How are benefits in a group pension plan (GPP) taxed?

The benefit received by the employee is taxed as employment income for personal income tax, and in the event of death the beneficiary/s will be liable for inheritance and gift tax. 

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1. Commitments arising from legal or contractual obligations of the company with its employees, as set out in a collective bargaining agreement or equivalent provision, which are aimed at making contributions linked to the contingencies set out in the regulations governing pension plans and funds, are considered in this regard. For the establishment of these commitments, an employment relationship within the enforcement scope of the Workers’ Statute must exist, and the employment relationship must be in Spain and subject to Spanish law.
2. The requirements and limits set out in current tax legislation must be complied with.
Products can only be taken out by residents of Spain.


Covers and services subject to the policy’s terms, conditions, limitations and exclusions as set out in the terms and conditions and schedule.

Insurance brokered by BanSabadell Mediación, Operador de Banca-Seguros Vinculado del Grupo Banco Sabadell, S.A., holder of Tax ID No. A-03424223, with registered office at Av. Óscar Esplá, 37, 03007 in Alicante, and registered in the Alicante Companies Register and in the Administrative Register of Insurance Distributors of the Directorate-General of Insurance and Pension Funds (DGSFP) under code OV-0004, having taken out a liability insurance policy pursuant to prevailing regulations on private insurance and reinsurance distribution. You can view the insurance companies with which BanSabadell Mediación has entered into an insurance agency contract on the website www.bancosabadell.com/bsmediacion.
Flexible Group Retirement Plan is a life/savings insurance policy of BanSabadell Vida, Sociedad Anónima de Seguros y Reaseguros, subject to the terms and conditions stated in the policy, holder of Tax ID No. A08371908 and with registered office at Calle Isabel Colbrand, 22, 28050 Madrid. Registered in the Madrid Companies Register and in the Insurance Entities Register of the Directorate-General of Insurance and Pension Funds (DGSFP) under code C-0557.